Can China develop the Guangdong-Hong Kong-Macao Greater Bay Area into a sustainable innovation technology and finance hub? Open Access

This paper reviews the development of China’s Greater Bay Area into a sustainable innovation technology and finance hub. It analyses the policy measures and actions taken by the governments to deal with the challenges and issues in the plan implementation. This paper argues that enhancing cross-border governance requires holistic planning, role specialisation, and technology-enabled collaboration. By addressing these challenges, the GBA can solidify its position as a leader in sustainable urban and economic development.

A “sustainable innovation technology and finance hub” is a dynamic ecosystem that strategically integrates technological innovation, financial mechanisms, and sustainability practices to foster solutions addressing environmental and social challenges, as well as promoting sustainable well-being (Etzkowitz and Klofsten, 2005; Hautamäki and Oksanen, 2015). Such innovative ecosystems should possess globally recognised competences and businesses, encourage the creation of new knowledge and technologies, and demonstrate the ability to attract both talent and investments. Key components — including environmental sustainability, technological advancements, financial innovation, and social inclusivity —must align with global standards for modern hubs.

The study employs a qualitative framework based on policy document reviews, including the GBA Development Plan 2021-2035 and case studies of key cities in the GBA, namely, Hong Kong and Shenzhen. A comparative approach evaluates the GBA’s progress against global best practices in sustainable urban development and innovation ecosystems. By examining policy frameworks, case studies, and global best practices, this study identifies key barriers — such as disparities in governance models, economic imbalances, and environmental sustainability — and proposes solutions. The findings underscore the necessity of cohesive policies, technology-driven governance, and ecological stewardship to achieve the GBA’s goal as an international innovation technology and finance hub in South China.

The GBA consists of the two Special Administrative Regions (SARs) of Hong Kong and Macao and nine cities in Guangdong province, including Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing, with a total land area of 56,000 square kilometres (Table 1, Figure 1, Figure 2). The total population is over 87 million, representing an enormous market, with GDP over RMB14 trillion (around US$1.97 trillion) in 2024 (HKG, 2025a). The GBA is home to many world-renowned research universities, large-scale national scientific projects and high-tech companies. It has outstanding capabilities in R&D and commercialisation, as well as several challenges.

On 1 July 2017, witnessed by President Xi Jinping, the National Development and Reform Commission and the governments of Guangdong, Hong Kong, and Macao signed the “Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Greater Bay Area” in Hong Kong. The Agreement sets out the goals and principles of cooperation and establishes the key cooperation areas in the GBA development. Since then, the relevant Central Government departments and the three governments have strived for policy breakthroughs with an innovative and open mind in taking forward the development the Bay Area jointly (HKG, 2025a).

The “Outline Development Plan for the Guangdong-Hong Kong-and-Macao Greater Bay Area” (“the GBA Plan”) was announced on 18 February 2019, whilst the goals are expected to be achieved by 2035. This GBA plan is an important component of the “Belt and Road Initiative” which has the vision of building a multi-dimensional and multi-tiered connectivity network between Asian, European, and African continents (HKG, 2025a).

The main goal of the GBA Plan is to develop the GBA into the most open, market-oriented, and innovative pole of economic growth in China. As a powerhouse for sustainable finance, innovation, and technology hub, GBA should lead in cutting-edge research, financial services, and technological advancements. It positions strategically in blending the international and Mainland Chinese business environments (Yu, 2021).

Specifically, development objectives (GBA Development Office, 2019) are stated:

1. Regional development should become more coordinated, and a city cluster which has a reasonable division of labour, complementary functions and coordinated development should basically be established.

2. The environment for coordinated innovative development should be enhanced, the aggregation of factors of innovation should be accelerated, and the innovation capacities regarding new technologies and the commercial application of scientific and technological achievements should be significantly enhanced.

3. Supply-side structural reform should be further deepened, the transformation and upgrading of traditional industries should be accelerated, the core competitiveness of emerging and manufacturing industries should continuously increase, the digital economy should see rapid growth, and the development of modern service industries such as financial service should be expedited.

4. Infrastructural support and protection, such as transport, energy, information and water resources, should be further strengthened, and urban development and management should be further enhanced.

5. A green, intelligent, energy-saving and low-carbon way of production and lifestyle, as well as mode of urban development and management, should be established initially, and the lives of residents should become more convenient and happier.

6. There should be accelerated development of the new system of an open economy, greater connectivity among Guangdong, Hong Kong and Macao markets, more effective and efficient flow of various resources and factors of production, and more vibrant cultural exchanges.

The mission envisages a new attempt to break new ground in pursuing opening up on all fronts, as well as a further step in taking forward the practice of “One Country, Two Systems”.

The basic principles include (GBA Development Office, 2019):

1. To be driven by innovation and led by reform.

2. To coordinate development and plan holistically.

3. To pursue green development and ecological conservation.

4. To open up and cooperate and achieve a win-win outcome.

5. To share the benefits of development and improve people’s livelihood.

6. To adhere to “One Country, Two Systems” and act in accordance with the law.

Development strategies are also listed below:

1. Coordinating city and regional plan.

2. Division of roles based on strengths.

3. Integrated development.

4. Efficient resource allocation.

5. Infrastructure planning and connectivity.

6. Policy consistency and harmonisation.

7. Ecological conservation and sustainable development.

8. A quality living circle for living, working and travelling.

Since Hong Kong and Macao are under different legal and administrative systems, specific cross-border measures are crucial in facilitating the flow of people, money, and information. The Central Government of China has hence implemented measures to facilitate cross-border movements, including simplifying cross-border procedures through information technology. The Hong Kong SAR Government has been actively reflecting Hong Kong people’s wishes to relevant Mainland authorities for greater convenience for Hong Kong people studying, working, and living in the Mainland. Since November 2019, the Central Government has promulgated many policy measures to benefit Hong Kong people and facilitate the development of various sectors in the GBA (HKG, 2025c).

Moreover, a wide range of measures covering different scopes for targeted groups have been adopted (HKG, 2025c). The following are some examples.

• Citizen-centric for the benefit of the general public:

  • 1.

    Hong Kong residents to be treated as local residents in purchasing properties in the Mainland cities of the GBA.

  • 2.

    Supporting the use of mobile electronic payment by Hong Kong residents on the Mainland.

  • 3.

    Ensuring that the children of Hong Kong and Macao residents working in Guangdong enjoy the same education as those of Mainland residents.

  • 4.

    Exploring the establishment of a cross-border wealth management scheme.

  • 5.

    Foreigners holding Hong Kong Permanent Identity Cards to be able to apply to the relevant Mainland authorities for a visa or permission for residence with a validity of up to two to five years to stay or reside in Mainland cities in the GBA.

  • 6.

    Permitting the use of Hong Kong-registered drugs and common medical devices in designated Hong Kong-owned healthcare institutions in the GBA.

• Supporting professional services:

  • 1.

    Relaxation on partnership associations by Hong Kong and Mainland law firms, employment of Hong Kong legal consultants and practice of Hong Kong legal practitioners in the Mainland cities of the GBA.

  • 2.

    Further extending the scope of mutual recognition of qualifications for construction professionals.

  • 3.

    Expanding the scope of liberalisation measures for construction professionals from Hong Kong and Macao to practice on the Mainland.

  • 4.

    Preferential treatment on insurance regulation.

• Promoting sustainable innovation and technology:

  • 1.

    Supporting the development of the Shenzhen-Hong Kong Innovation and Technology Co-operation Zone.

  • 2.

    Facilitating customs clearance of imported animal-derived biomaterials.

  • 3.

    Relaxing the limitation on exporting Mainland human genetic resources to Hong Kong and Macao.

• For the start-up, business and the working people:

  • 1.

    Starting from 1 January 2019, an individual who has no domicile and has resided in the Mainland for an annual aggregate of 183 days or more for less than six consecutive years, shall, upon filing records with the relevant tax authorities, not be required to pay individual income tax with respect to his/her income derived from sources outside the Mainland and paid by institutions or individuals outside the Mainland.

  • 2.

    The requirement for the people of Hong Kong and Macao to apply for employment permits for working in the Mainland has been removed.

  • 3.

    Hong Kong and Macao people working in the Mainland can join the Housing Provident Fund and enjoy the same treatment accorded to Mainland residents in terms of base deposit, deposit ratio, processing procedures, as well as the drawing of money from the Housing Provident Fund, and the application for personal housing loans under the Housing Provident Fund, etc.

  • 4.

    Eligible Hong Kong and Macao residents can take part in the qualification accreditation examinations for primary and secondary school teachers.

  • 5.

    The introduction of a host of talent schemes and youth development plans to facilitate Hong Kong people’s development in the GBA.

• For education and study:

  • 1.

    It is specified in clear terms that to protect the rights and interests of Hong Kong and Macao students, Mainland higher education institutions and relevant authorities must accord equal treatment for Hong Kong and Macao students in admission, nurture, management, and supporting services.

  • 2.

    Mainland higher education institutions should facilitate Hong Kong and Macao students’ job search and employment and issue Employment Agreements and Employment Registration Certificates to them upon their graduation.

  • 3.

    Both the quota and number of scholarships open to Hong Kong and Macao students as well as overseas Chinese students studying at Mainland higher education institutions have been increased.

  • 4.

    The Guangzhou Municipal Education Bureau has approved the Guangdong Overseas Chinese High School to enroll children of Hong Kong and Macao.

• For daily living:

  • 1.

    Hong Kong residents living in the Mainland who meet the relevant criteria can apply for residence permits. A residence permit holder is entitled to enjoy, in accordance with the law, three categories of rights, six basic public services, and nine facilitation measures in the place where he or she is residing. This covers areas relating to daily living including employment, education, medical care, travel, financial services, etc.

  • 2.

    The People’s Government of Shenzhen Municipality announced on 21 August 2019 the expansion in the scope of facilitation measures for senior citizens who have reached the age of 60. Hong Kong and Macao residents living in Shenzhen who are holders of residence permit are also eligible. Shenzhen is the sixth GBA Mainland city after Dongguan, Huizhou, Zhuhai, Foshan, and Jiangmen to offer free public transports to Hong Kong senior citizens.

  • 3.

    The interim measures announced on 29 November 2019 stipulated rules for Hong Kong, Macao, and Taiwan residents working, doing business, living or studying in the Mainland to join the local social insurance scheme. The interim measures took effect on 1 January 2020.

  • 4.

    The China Railway Corporation has installed automatic ticket vending and issuing machines to read and verify Home Visit Re-entry Permits at train stations of various provinces and cities with relatively large demand for ticketing services from Hong Kong people. This can reduce the amount of time otherwise spent on queuing over the counter.

• Other recent measures to reduce barriers between cities:

  • 1.

    In June 2023, Cyberspace Administration of China and Hong Kong’s Innovation, Technology and Industry Bureau signed a MOU to establish rules for data transfer within the GBA under China’s data security framework. This helps build Hong Kong into a global data hub.

  • 2.

    Industries like smartphone, AI, biomedicine, new energy, and new materials will elevate the GBA into the knowledge economy stage.

  • 3.

    In March 2023, Hong Kong signed several agreements with other city governments on information and technology, finance, smart city development, and regulations of pharmaceutical and medical devices.

  • 4.

    Guangdong province has introduced a preferential individual tax subsidy for foreign talent living in the GBA.

  • 5.

    The development of the Northern Metropolis between the border of Hong Kong and Shenzhen will further drive the integration of Hong Kong with Shenzhen and the GBA.

  • 6.

    Shenzhen-Zhongshan bridge opened on 30 June 2024 and other high speed rail routes will make every destination in the GBA ecosystem accessible within an hour’s commute, call it a “One hour living circle”.

  • 7.

    Remove stringent restrictions on Hong Kong-Zhuhai-Macao Bridge and increase “Hong Kong cars going north” and “Macao cars going north” making a remarkable growth of cars using it.

  • 8.

    Allow non-Chinese permanent Hong Kong residents to get a 5-year visiting pass to enter the Mainland.

  • 9.

    Grant over 50 countries’ citizens to visit and stay for 144 hours in the Mainland without the need to apply for a visa.

  • 10.

    Propose to extend cross-border customs clearance time and full implementation of “Two inspections in one place”.

  • 11.

    Promote “Hong Kong-funded and Hong Kong-based arbitration” for enterprises in commercial dispute resolution.

The GBA aims to be a powerhouse for finance, innovation, and technology. Its significance lies in its strategic positioning as a hybrid governance model, blending market-driven Mainland policies with the autonomy of Hong Kong and Macao SARs (Li et al., 2022). This unique framework enables the region to serve as a bridge between international capital markets and Mainland China’s industrial ecosystem, fostering cutting-edge research, financial services, and technological advancements. However, this hybrid model also faces challenges and obstacles in institutional coordination. There is a need for harmonised policies to maximise stakeholder engagement and economic integration.

The GBA has made significant achievements in sustainable innovation, driven by strong policy support for R&D investment, cross-border collaboration, and green technology incentives. Initiatives such as the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone (referred to as “Hetao Innovation Zone”) demonstrate how cross-border partnerships accelerate innovation, attracting global talents and companies and reducing carbon emissions through green infrastructure. Additionally, the region’s digital transformation — exemplified by blockchain-enabled cross-border payments — has streamlined financial transactions and enhanced efficiency. These achievements align with frameworks emphasising innovation ecosystems and urban sustainability, positioning the GBA as a model for other global hubs.

Despite the GBA’s significant progress and comprehensive policy measures and actions, the following challenges still need to be addressed.

• (a) Legal and regulatory differences between cities

The GBA’s integration is complicated by divergent legal systems across the jurisdictions of the nine cities in the Mainland and two SARs, particularly between Hong Kong’s common law framework and Mainland China’s civil law system. For instance, Hong Kong’s data privacy regulations under the Personal Data (Privacy) Ordinance (PDPO) lack specific cross-border transfer rules, while Mainland cities adhere to the stringent Personal Information Protection Law (PIPL), creating compliance hurdles for businesses operating across borders (China Briefings, 2024). Efforts to harmonise these differences, such as the Qianhai Court’s bilingual legal guides comparing Mainland and Hong Kong corporate and private lending laws, highlight the complexity of aligning judicial practices (Qianhai Shenzhen, 2024). Despite pilot programmes allowing 470 Hong Kong and Macao lawyers to practice in Mainland GBA cities since 2021, regulatory gaps in commercial arbitration and intellectual property rights persist, slowing cross-border dispute resolution (Ministry of Justice PRC, 2024).

• (b) Data privacy and security concerns

Cross-border data flows face significant barriers due to mismatched regulatory regimes. While Mainland GBA cities require security certifications for data transfers under PIPL, Hong Kong’s lack of equivalent rules creates uncertainty for multinational firms. The 2024 GBA Data Transfer Guide introduced a voluntary mutual recognition mechanism, but its limited scope (excluding “critical data”) and non-binding nature have led to low adoption rates among Hong Kong-based enterprises. Moreover, concerns over state access to personal data under Mainland laws may deter foreign investors, despite the GBA’s push to become a digital economy hub (China Briefings, 2024).

• (c) Technological infrastructure and inter-operability

Although the GBA has built world-class hardware infrastructure — such as the 2,700-km railway network and the Hong Kong-Zhuhai-Macao Bridge — soft infrastructure gaps remain. For example, cloud computing platforms used by Shenzhen’s tech firms often employ different hypervisors and data protocols than those in Hong Kong, hindering seamless data sharing. The lack of standardised applications for fintech services also complicates integration between Hong Kong’s international banking systems and Mainland mobile payment platforms like WeChat Pay. These interoperability issues are exacerbated by competing municipal priorities; while Shenzhen focuses on AI-driven governance, Guangzhou prioritises traditional manufacturing digitisation.

• (d) Resistance to change and capacity building

Local bureaucracies in smaller GBA cities (e.g., Zhaoqing) often lack the expertise to implement advanced policies as compared with Guangzhou or Shenzhen. Moreover, partly due to complex accreditation processes and cultural barriers, only 3,200 Hong Kong professionals (e.g., doctors, architects) have obtained licenses to work in Mainland GBA cities since 2019. Training programmes for civil servants on cross-border collaboration, such as those under Guangdong’s “Bay Area Connect” initiative, have reached fewer than 10,000 officials, leaving implementation gaps in hinterland regions (China Daily, 2025).

• (e) Coordination among government agencies

Fragmented governance is evident in infrastructure planning. The Shenzhen-Zhongshan Link, while reducing travel time to 30 minutes, required 17 separate approvals from Guangdong, Hong Kong, and Macao authorities due to conflicting environmental and safety standards. Similarly, the Qianhai cooperation zone’s financial reforms face delays as Hong Kong’s Monetary Authority and China’s central bank negotiate yuan convertibility limits. The absence of a supranational GBA authority forces reliance on ad hoc joint conferences, which lack enforcement power (Ministry of Justice PRC, 2024).

• (f) Disparities in financial resources and investments

There is huge diversity amongst the economic development of the nine Guangdong cities. For example, Shenzhen has per capita GDP of US$20,000, whereas that of Zhuhai is US$12,000, which is triple that of Zhaoqing. While the GBA attracted RMB5.7 trillion in pledged investments during its 2024 Global Promotion Conference, funding disparities persist. Shenzhen’s R&D budget (RMB500 billion in 2023) dwarfs Zhaoqing’s entire fiscal revenue (RMB32 billion), limiting equitable growth. Green finance initiatives, such as Qianhai’s carbon-neutral bonds, struggle to scale due to Mainland banks’ risk aversion and Hong Kong’s stricter ESG disclosure rules (China Briefing, 2024).

In summary, the GBA faces three core challenges. First, regulatory harmonisation, including divergent data privacy laws, licensing requirements, and customs procedures between Mainland China, Hong Kong, and Macao hinder seamless integration. Second, economic disparities remain while Shenzhen and Guangzhou thrive in tech and manufacturing, other cities like Zhaoqing and Jiangmen lag, risking uneven development. Third, environmental sustainability could be a concern with rapid urbanisation which may strain ecosystems, necessitating stronger balance between growth with conservation.

To address some of the above challenges, policymakers may need to prioritise some harmonised regulations (Patchell, 2023). For example, a GBA-wide data governance framework would standardise cross-border data flows while maintaining security. The role specialisation among the various cities can be further enhanced. For example, leveraging Shenzhen’s tech ecosystem and Hong Kong’s capital markets may co-develop green finance products, such as carbon trading platforms. Digital infrastructure may be expanded to scaling blockchain-based payment systems to reduce transaction times and enhance financial interoperability. To address the economic disparities amongst the various cities, administrative and tax incentive policies should be introduced to encourage firms and education institutes to invest in less developed areas. Some non-core cities such as Zhaoqing have invited the second-tier Hong Kong universities to set up branch campuses there. A new GBA coordination office with representatives from all the 11 cities may be set up to tackle and mediate the issues and challenges in the development process.

The COVID-19 pandemic had significantly disrupted policy implementation globally from 2019 onward, including within the GBA. The lockdowns and supply chain interruptions in early 2020 delayed numerous infrastructure and innovation projects. However, pandemic-driven policies also accelerated digitalisation and technological adoption. For example, China’s rapid deployment of smart healthcare technologies, including health code apps and contact tracing systems, enhanced digital infrastructure in the GBA (National Health Commission of the People’s Republic of China, 2018).

The pandemic had disrupted the finance and innovation networks initially through economic contraction and reduced foreign investment. Yet, official responses like fiscal stimulus, special bonds, and targeted support for industries helped mitigate these impacts. In Hong Kong and Shenzhen, pandemic policies accelerated digital transformation and fintech adoption, though strict travel restrictions hindered cross-border collaboration and slowed physical integration efforts (HKIMR, 2022). Overall, while COVID-19 initially hindered development goals by causing delays and economic pressures, it has ultimately pushed the GBA toward faster digital integration and innovation in technology and finance, though at the cost of temporary setbacks in physical connectivity and mobility.

Hong Kong and Shenzhen are selected as key case studies in the GBA. This section examines their features, as well as the interplay between inter-city competition and cooperation.

Hong Kong plays a pivotal role in the development of GBA with its strategic position as the gateway between Mainland China and the world (Sharif and Chandra, 2022).

• A. Infrastructure leadership and connectivity

Hong Kong serves as the GBA’s global financial and logistics hub, leveraging its US$363 billion GDP (2024) with per capita of US$48,000 and world-class infrastructure. Hong Kong has a well-developed transport system that includes buses, trams, ferries, and the Mass Transit Railway (MTR) system, which is one of the most efficient and densely used metro systems in the world (carries 90 percent of all passengers). Hong Kong International Airport is a major transportation hub in the region, also ranks top globally for cargo throughput, while its Port Community System enhances real-time tracking for cross-border e-commerce, aligning with plans to become a regional logistics hub.

Hong Kong and the Mainland are closely connected. With well-developed cross-border transportation networks and cross-border facilities, there are frequent contacts between the two places and cross-border passenger traffic has been on the rise in recent years (Park et al., 2022). In 2019, over 236 million passenger trips crossed the border via land crossings, which include Lo Wu, Lok Ma Chau Spur Line, Hung Hom, Shenzhen Bay Port, Lok Ma Chau (Huanggang), Sha Tau Kok, Man Kam To, West Kowloon Station, and Hong Kong-Zhuhai-Macao Bridge (HZMB) Hong Kong Port, with a daily average of over 640,000 passenger trips.

The Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) connects with the national high-speed rail network and greatly shorten the travelling time between Hong Kong and Shenzhen, Guangzhou, and other cities in the GBA. It consolidates Hong Kong’s position as a regional transport hub.

The Hong Kong-Zhuhai-Macao Bridge (HZMB) opened in October 2018, spans from Hong Kong port to Zhuhai and Macao with a total length of 41.6 km. Together with the 13.4 km-long Zhuhai Link Road, the total length is 55 km. It is the longest bridge-cum-tunnel sea-crossing in the world. It reduces the travelling time between the Kwai Tsing Container Terminals and Zhuhai from currently 3.5 hours or so to about 75 minutes; reduces the travelling time between the Hong Kong International Airport and Zhuhai from currently 4 hours or so to about 45 minutes; incorporates the western side of the Pearl River Delta into a reachable “three-hour commuting radius” of Hong Kong. Moreover, Hong Kong is now connected with the over 30,000-km National High Speed Rail Network, having direct train service to 58 Mainland destinations. The travelling time for trains departing from the West Kowloon Station is shortened tremendously with about 14 minutes to Futian (a district in Shenzhen), about 18 minutes to Shenzhen North, and about 46 minutes to Guangzhou South.

• B. Top financial centre with unique strengths

Hong Kong’s key industries include finance, trade, tourism, logistics, and professional services. Backed up by unique strengths with numerous advantages under the “One Country, Two Systems” framework, free flow of capital and information, rule of law, safe and low crime rate, clean government, independent legal and judicial system, robust intellectual property protection regime, friendly and easy business environment, low and simple tax regime, diverse and international talent pool, good transport and communication infrastructure.

Amongst the world’s top financial centres, Hong Kong is ranked third, with well-established stock market, and a gateway to China. The first is New York City which is home to Wall Street and major financial institutions, followed by the London which is the historic financial hub with banking, insurance, and foreign exchange. Hong Kong is also ranked first amongst the World’s Freest Economies with the score of 10 by Fraser Institute Canada in 2024 (China Daily, 2024).

• C. Roles of Hong Kong in the GBA Plan

The roles of Hong Kong in the GBA include basic research, applied research, prototype development, testing and certification, marketing and other professional support (e.g., intellectual property protection), mass production and manufacturing, fund raising in capital market, and a bridge connecting GBA, Mainland China, and the world.

The GBA Plan (GBA Development Office, 2019) identifies eight key functions for Hong Kong, which are as follows:

1. Consolidate and strengthen its status as the international financial, shipping and trade centre.

2. Strengthen its status as an offshore renminbi business hub, international asset management centre, and risk management centre.

3. Develop finance, trade and commerce, logistics and professional services towards the high-end and high value-added direction.

4. Forcefully promote innovation, science and technology.

5. Cultivate emerging industries; build up Hong Kong as the centre of international legal and arbitration services; and construct a competitive international metropolis.

6. Hong Kong, one of the four core cities in the GBA with Guangzhou, Shenzhen, and Macao, with comparative advantages such as well-established institutions, sound legal system, abundant talents, free information circulation, advanced financial and service systems, and extensive international contacts, should perform pivotal, coordination and central functions in the GBA.

7. Being an integral part of the GBA, Hong Kong is expected and supported by the Central Government to develop into a hub of the Area, and leveraging on Hong Kong’s status as an international metropolis, to connect the Area with the world.

8. GBA will enable Hong Kong to integrate fully into the country’s development. Leveraging on its advantages of “One Country, Two Systems”, Hong Kong can contribute to the country and pave way for the GBA to further link up with the world.

• D. Innovation and cross-border synergies

Hong Kong’s collaboration with Shenzhen in the Northern Metropolis and Hetao Innovation Zone aims to create 150,000 tech jobs, focusing on AI, fintech, and green technologies. A pilot programme for cross-border data flows (covering banking and healthcare) reduces compliance costs, addressing regulatory fragmentation — a unique challenge compared to mature bay areas like New York or Tokyo.

The “One Country, Two Systems” framework enables Hong Kong to bridge the Mainland and global markets playing the role of super-conductor, but hurdles remain. For example, the regulatory misalignment with divergent data privacy laws and licensing requirements will hinder talent mobility. Moreover, with the land constraints of only 1,106 square kilometres, Hong Kong faces shortage of usable land for long term development. The high living expenses may deter the stay of the talent.

For the future pathways, to sustain leadership, Hong Kong has to deepen GBA integration, expand the financial reforms and mutual recognition of professional licenses, boost green finance, leverage its offshore RMB hub status to fund GBA-wide carbon-neutral projects, enhance digital ecosystems, standardise applications for fintech interoperability with Mainland platforms like WeChat Pay. One example of financial innovation of Hong Kong is that the Hong Kong Monetary Authority has formulated a regulatory regime for stable coin issuers in Hong Kong (HKMA, 2025). Stable coins are virtual assets that are designed to maintain a stable value relative to certain assets, typically currencies.

Hong Kong’s success hinges on balancing global connectivity with regional cohesion, transforming the GBA into a “high-end, high-value-added” economy. By addressing integration bottlenecks and capitalising on its legal autonomy, financial strengths, and infrastructure, the city can solidify its role as the GBA’s gateway to the world.

Shenzhen is selected as another case study of GBA given its pioneering and strategic role amongst the nine cities in Guangdong province.

• A. Economic and technological leadership

The population of Shenzhen is estimated to be around 17.5 million people (2024) with the land area of 2,050 square kilometres. With GDP of US$364 billion and per capita GDP of US$20,800, making it one of the wealthiest cities in China (Shenzhen Luohu Government, 2025). It has experienced rapid population growth due to its status as a leading tech hub. The city’s economy has thrived, driven by industries such as technology, finance, logistics, and manufacturing. Key industries in Shenzhen include information technology, biotechnology, financial services, and advanced manufacturing. Shenzhen, standing as the GBA’s innovation engine, is driven by its dominance in technology (e.g., Huawei, Tencent), biotech, and advanced manufacturing integrating AI and robotics into production. Shenzhen’s R&D intensity (6.46 percent) surpasses Hong Kong’s service-oriented economy, fuelled by collaborations with universities like Southern University of Science and Technology (SUSTech) and global tech hubs.

• B. Shenzhen as a low carbon city

Shenzhen is a benchmark and model for sustainable urban development in China and globally, which successfully reduced carbon emissions and energy consumption alongside GDP growth through integration of economic development with environmental sustainability. The Government undertakes effective strategic approach to achieve innovation and sustainability goals, for example, apply low carbon urban planning and construction, promote renewable energy utilisation, and green transportation systems through integrated comprehensive planning and policies on green technologies. Supported by public policies and incentives to adopt electric vehicles (EVs) and the necessary electricity charging infrastructure, Shenzhen is a leader in electric mobility, showcasing GBA’s commitment to innovative solutions for sustainable transportation.

• C. Infrastructure and connectivity

Shenzhen’s strategic infrastructure projects exemplify GBA integration. For example, the 24 km long Shenzhen-Zhongshan Bridge consisting of a cluster of infrastructure, including a sea-crossing bridge, a subsea tunnel, artificial islands, and an underground interchange opened in June 2024. With four lanes in each direction and with a speed of 100 km/h, the Bridge connects Shenzhen, Zhongshan, and Nansha District of Guangzhou. It is the only direct expressway connecting Shenzhen, Dongguan, and Huizhou with Zhuhai, Zhongshan, and Jiangmen, reducing the travelling time between Shenzhen and Zhongshan from two hours to 20 minutes. Such connectivity has significantly enhanced the supply chain efficiency.

Shenzhen has successfully embodied the GBA’s “innovation-sustainability” paradox, leveraging its tech prowess and infrastructure to drive regional cohesion while grappling with probably higher environmental costs. By addressing policy and ecology, the city can solidify its role as the GBA’s core node, bridging Mainland dynamism with global standards.

After studying the unique characteristics of both Hong Kong and Shenzhen, it reveals that there are both areas of competition and cooperation. Hong Kong and Shenzhen have been competing for international talent (through various talent attraction schemes), venture capital and tech start-ups (different incentives plans offered by both governments). On the other hand, there are areas of cooperation, for example, the Hetao Innovation Zone is a flagship collaborative project which is beneficial to both cities. It envisions seamless cross-border infrastructure connectivity, aligned regulatory frameworks, and clusters of key laboratories (Shenzhen Government Online, 2025).

The GBA demonstrates both competitive strengths and developmental gaps when benchmarked against the world’s three other leading bay economies — Tokyo, New York, and San Francisco.

The Tokyo Bay Area covers Tokyo and its seven surrounding prefectures, which is under one country and one jurisdiction of Japan. Second, the San Francisco Bay Area covers nine counties bordering the San Francisco Bay. Like Tokyo Bay Area, it is within one state, California, also under the same jurisdiction. Third, the New York Bay Area covers the three states of New York, New Jersey, and Connecticut with 23 surrounding counties. These tri-states have different laws, rules, and regulations. For GBA, it involved three different jurisdictions of Mainland China, Hong Kong, and Macao. Hence, the context of GBA is like New York Bay Area which is much more complicated as it involves different administrative, legal, and social environments.

As shown in Table 2, as of 2024, the GBA has already solidified its position amongst the other three Bay Areas with GDP of US$1.97 trillion, getting close to Tokyo Bay (US$2.08 trillion) and surpassed San Francisco (US$1.95 trillion) in absolute output, and heading towards New York Bay (US$2.3 trillion) in growth momentum, though New York retains the highest absolute wealth concentration. The population of over 87 million people dwarfs all three peers combined, reflecting a unique scale-density dynamic. Moreover, the GBA’s hybrid economic model — combining finance (65 percent services share), advanced manufacturing (e.g., BYD’s new electric vehicles), and tech innovation (Shenzhen’s 6.46 percent R&D intensity) — contrasts with the mature, services-dominated ecosystems of Tokyo (85 percent services) and New York (77 percent), as well as San Francisco’s tech-centric profile (73 percent services). The GBA’s rapid growth in innovation (e.g., Shenzhen’s patent leadership) and infrastructure (e.g., Hong Kong-Zhuhai-Macao Bridge) positions it as a developing powerhouse, contrasting with the entrenched maturity of New York’s finance hub or San Francisco’s tech ecosystem. It becomes the only world-class Bay Area which integrates finance, professional services, technology, and advanced manufacturing (Table 2).

The main strengths of the GBA over the other bay areas lie on its outstanding capabilities in scientific R&D and commercialisation, home to world-renowned universities (Tang, 2022), scientific research institutes, high-tech enterprises and large-scale national scientific projects (Ba et al., 2022).

Challenges remain in balancing regional disparities and upgrading industrial structure, but the GBA’s integration under “One Country, Two Systems” offers unparalleled flexibility to blend Hong Kong’s financial depth with Mainland China’s manufacturing and tech ambitions.

The GBA as a powerhouse for finance, innovation, and technology, its significance lies in its strategic positioning as a hybrid governance model, blending market-driven Mainland policies with the autonomy of Hong Kong and Macao SARs. This unique framework enables the region to serve as a bridge between international capital markets particularly via Hong Kong and Mainland China’s industrial ecosystem, fostering cutting-edge research, financial services, and technological advancements. However, this hybrid model also introduces challenges and obstacles in institutional coordination, as highlighted in the above discussion, which stresses the need for harmonised policies to maximise stakeholder engagement and economic integration.

The GBA is China’s ambitious vision to create a world-class integrated region comparable to the Tokyo Bay Area, New York Bay Area, and San Francisco Bay Area. It combines the Mainland’s manufacturing prowess with Hong Kong’s financial infrastructure and Macao’s tourism expertise. The GBA’s significance focuses on its unique tripartite synergy: leveraging Hong Kong’s financial and legal infrastructure, Shenzhen’s technological prowess (home to big corporations such as Tencent and Huawei), and Macao’s tourism and Portuguese-speaking market linkages. The GBA’s ambition extends beyond economic integration; it aims to become a “high-quality development” model by 2035, balancing innovation with sustainability through green finance initiatives and carbon neutrality targets.

Strategically positioned along the Pearl River Delta, the GBA serves as a critical nexus for global trade, technological innovation, and cross-cultural exchange. For example, infrastructure projects like the Hong Kong-Zhuhai-Macao Bridge (the world’s longest sea crossing) and a 2,700-km railway network are essential for facilitating cross-border mobility and creating a “one-hour living circle” for residents.

While the GBA’s potential is immense, its fragmented governance structure poses challenges. Differences in legal systems (e.g., Hong Kong’s common law versus Mainland China’s civil law), regulatory frameworks, and priorities among cities hinder cohesive policymaking. For instance, Shenzhen’s tech-driven economy contrasts with Macao’s reliance on gaming and tourism, complicating alignment on innovation strategies.

China’s GBA represents a transformative initiative to integrate nine Mainland cities in the Guangdong province, and the two Special Administrative Regions in Hong Kong and Macao into a globally competitive hub for technology, finance, and innovation. As a major national development strategy which was articulately planned, deployed and promoted, it reflects the strong determination and ambition of the China’s Central government.

Notably, the collaboration between the governments and the communities — the market, private enterprises, and professional bodies — will play a critical role. Moreover, it requires joint effort of the central and local governments to enhance the competitiveness of the region through economic integration, complementary advantages, and division of labour. The GBA covers the South China region, and it will hopefully become a powerful driving force for China’s overall development.

To conclude, the GBA’s journey to becoming a sustainable innovation technology and finance hub is promising but requires long-term policy coherence, collaborative governance, and inclusive growth strategies. By learning from global peers and leveraging its unique strengths — such as the “One Country, Two Systems” framework — the region can hopefully overcome administrative fragmentation and set a global benchmark for urban development. Policymakers have to balance economic ambition with ecological stewardship to ensure prosperity benefits all residents, securing the GBA’s position as a 21st-century leader in finance, technology, and sustainability.

This paper is based on a presentation by Peter K.W. Fong in the panel on “Stronger Together Voluntary Metropolitan Coordination Across Local Boundaries on SDGs and Governance – Cases from Europe and Asia” at the IIAS-DARPG 2025 Conference held on 20 February 2025 in New Delhi, India.

This paper forms part of a special section “Special Issue on Guangdong-Hong Kong-Macao Greater Bay Area (GBA) in China: building a world-class finance, innovation and technology hub”, guest edited by Prof Roger C.K. Chan, Prof Peter K.W. Fong and Dr Alice Y.C. Te.